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Expert opinions: 5 common mistakes companies make when managing subcontractors

Posted by Len Simmons on Sep 28, 2016 11:03:55 AM

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Subcontractor problems, such as delays and incidents can really hit your projects hard, leading to disgruntled clients and bosses too. Thankfully, these problems are a common occurrence, which means experts from different backgrounds and sectors have their own opinion on what can be done to negate problems before they happen.

Here, we share the opinions of industry experts on five of the most common mistakes companies make when managing subcontractors.

1 - “Having inconsistent processes”

Jay Lash, Vice President of Corporate Development for MBO Partners, is responsible for procurement and HR communities in the organisation. He had his say on how inconsistent processes make for a messy on-boarding process of subcontractors.

“Too many times companies allow other manager and executive leadership to “wing it” when bringing in consultants. Taking the time at the front-end to initiate a thoughtful process that cover the bases will pay off in the long run. Organisations should aim to provide a consistently good experience for the talent, while also protecting the company from potential liabilities.”

2 - “Not having appropriate types and amounts of insurance”

Ron Formanek, CEO of Telecom Solutions Inc, spoke about the importance of checking and managing insurance of subcontractors.

“Being sure they are carrying the appropriate types and amounts of insurance, if they have any at all is important. If not you could end up being liable for it when your own insurance companies audit you at the end of the year.”

3 - “Not creating clear accountability”

Managing Partner with consultancy firm Enshored, Ian Jackson reveals that clear accountability is essential to get the job done and avoid a situation which is frustrating for all parties.

“Everyone must be clear on what their role is and where their responsibilities start and end. You must also not expect more than what you are paying them for. I also believe that you need extra regular communication both one –on-one and with groups of contractors working in the same area to align everyone and deal with the knowledge gaps.”

4 - “Not managing them properly”

Deborah Schroeder-Saulnier is founder and CEO of global management firm Excel Leadership Solutions. Working with a number of Fortune 500 companies Deborah has witnessed big firms simply failing to manage their subcontractors properly.

“Very quickly you can get into schedule delays, missed deadlines, scope creep, cost over-runs, communication issues, role confusion, and much more. Setting the agenda and guiding the experts through a single point of contact, beginning with onboarding, reduces conflict and confusion on several fronts, thereby reducing cost and ensuring greater success in achievement of the respective goals.”

5 - “Not setting clear and measurable goals”

Hamilton Powell, CEO of luxury watch consignment company, Crown & Caliber LLC, pointed out that it is a lack of measured goals that can lead subcontractors astray.

“It is very important to set expectations and relay them to the appropriate parties. The goals and expectations must be realistic and communicated properly. Constant communication is important to ensure that everyone’s expectations and goals are aligning properly. To make sure that these goals are being achieved, it is helpful to set milestones and deadlines. This way, all involved parties can make sure that they are staying on track and are still working toward the correct goals.”

Assessing capability, managing and monitoring

Three problem areas that are prominent in the quotations above are that businesses struggle with assessing subcontractor capability, managing them efficiently, and monitoring their performance after the project.

These three areas, however, which can be explored in more detail in our Managing Subcontractor’s Guide, can be used as a framework alongside compliance to negate problems such as the five highlighted above with subcontractors.

To find out more about how you can help shape a more efficient and compliant set of subcontractors, take a look at the free Altius subcontractor guide here.

Download the contractor's guide to: managing subcontractor compliance

 

Topics: Contractors